Delivery of Care

How UHIP has damaged the ecosystem of long term care in RI

Family-owned nursing home in Foster, one the town’s largest employers, announced last week it was planning to close its doors, an apparent victim of the UHIP upheaval and continuing state cuts to Medicaid reimbursements

Photo courtesy of Virginia Burke

Virginia Burke, president and CEO of the R.I. Health Care Association.

By Richard Asinof
Posted 8/14/17
An in-depth interview with Virginia Burke, president and CEO of the R.I. Health Care Association, identifies the stressors that have damaged the long-term care ecosystem in Rhode Island, with severe consequences.
Will the new dean of the Brown School of Public Health create a study of what went wrong with the launch of UHIP and what can be learned so as not to repeat the mistakes made? When will a discussion take place that examines the current failures in the Reinvention of Medicaid program, with an eye toward making course corrections? What is the status of the planned accountable entities for Medicaid long-term care services? Will the R.I. General Assembly ever investigate the high cost of managing the Integrated Care Initiative and the lack of outcomes? How is R.I. EOHHS planning to coordinate the reconciliation of interim Medicaid payments made to skilled nursing facilities? When will there be a cost analysis of the demographic trends facing Rhode Island because of an aging population and the increased demands for health services? Is there a way to talk about UHIP without trying to score political points?
Why is it so hard to have the dissonant voices heard by government leaders and officials – and, for that matter, the news media? The frustrations voiced by Virginia Burke at her inability to engage with the Governor or with Elizabeth Roberts about the serious doubts attending the launch of UHIP is symptomatic of a deeper problem. It is, in many ways, similar to the experience of a patient trying to talk back to a physician, refusing to take a prescribed medication, such as statins or addictive painkillers. The ability to say no – even at the risk of being labeled for insurance purposes as being non-adherent to medication – gets at a basic problem of communication in health care: the inability to listen.

PROVIDENCE – When ConvergenceRI sat down on Friday morning, Aug. 11, to talk with Virginia Burke, the president and CEO of Rhode Island Health Care Association, which represents 59 skilled nursing facilities in Rhode Island, the airwaves were abuzz on talk radio about the abrupt shutdown of a home health care agency, Homefront Health Care.

At times, in talking about the events, WPRO’s Gene Valicenti and Tara Granahan and even Gov. Gina Raimondo appeared to be confused about the differences between Homefront Health Care, which provides home-based nursing assistance, and skilled nursing facilities such as nursing homes, mistakenly referring to Homefront Health Care as a nursing home.

[If it was confusing to news talk show hosts, imagine what it was like for listeners and health care consumers.]

The upshot of the story was that the patients and staff of the nonprofit agency were transferred to Home Health and Hospice Care of Nursing Placement, another provider of home-based nursing services, in an emergency rescue intervention.

But, in all the hubbub, perhaps a much bigger story was missed: the planned closing of the Nancy Ann Nursing Home, a family-owned skilled nursing facility in Foster, one of the town’s largest employers. The reason for closing was the facility said it could no longer continue to operate in the current financial environment. Nancy Ann will remain open until all of its residents are transferred elsewhere.

“It was one of the gems of my association,” Burke told ConvergenceRI. “It really was a nursing home that operated like a home, with 20 beds. The same person that cooks your food might serve your food.”

For residents of the now-closed nursing home, Burke continued, “It was sort of like living with your family when you were there. Everybody knew everybody. It was like a village. I don’t know where those people are going to go,” Burke added, “but they are not going to be close to home anymore.”

Burke attributed the closing of Nancy Ann Nursing Home to the stressors in the long-term care ecosystem in Rhode Island, stressors that were exacerbated by the botched rollout of the more than $400 million Unified Health Infrastructure Project, or UHIP, where delayed reimbursements from Medicaid for long-term care services pushed many skilled nursing facilities to the brink of filing for bankruptcy.

When asked if there were any other skilled nursing facilities that were in immediate jeopardy, Burke said no. Instead, the trend is that many family-owned businesses are selling to out-of-state chains, sometimes resulting in a change of character where the family touch may be lost.

“When you have family-owned facilities, you’re in the same community, and know each other,” Burke explained. “If I bring my father to you because we just can’t care for him anymore, you know me, our kids played on the same softball team together, and you’re hiring people from my community that I know as well.”

In some cases, Burke continued, the out-of-state corporation has more resources. “It can put money into the building, you know, fix the roof, bring in more staff. For example, Genesis does that; Genesis does a good job. We’re fortunate that they have nine facilities in the state. But there are definitely some out there that I don’t want to see in Rhode Island. Check out Massachusetts, where they’ve had some bad experiences with out of state chains.”

Burke also got granular about the details regarding two pending lawsuits in Superior Court, one involving the decision by the R.I. Executive Office of Health and Human Services to continue to apply a 2 percent funding to Medicaid payments funds to nursing homes, initially presented as a 12-month, one-time cut in the FY 2016 budget, beginning on July 1, 2015, as part of the Reinvention of Medicaid.

According to Burke, the language appeared to sunset the provision, and initially, the General Counsel and Deputy Secretary agreed at R.I. EOHHS agreed.

But, later, the agency changed its mind, and so that 2 percent cut to the nursing home industry, which was supposed to be temporary, Burke said, has never been restored.

A second legal case now pending in Superior Court involves what appeared to be a glitch related to R.I. EOHHS’s failure to follow procedures when the agency implemented a new payment system, without properly amending the state Medicaid plan, according to Burke.

“EOHHS screwed up the amendment process,” Burke explained. Because, under the Medicaid global waiver, the state agency is not supposed to implement the changes until the amendments have been approved. “But someone forgot to read the rules,” Burke said.

The result, according to Burke, was that the feds decided not to make the new payment system fully retroactive, and requested that the state go back two years later and "undo" the first seven months of the new system. As a result, some facilities received bills for as large as $300,000 from the state. These were facilities that were told to spend their uptick in rates on patient care, according to Burke.

“The nursing facilities did nothing wrong,” Burke said. “The state wanted the nursing facilities to pay for the state’s mistake.”

Nationwide, Burke continued, nursing homes have a profit margin of about 1.8 percent. “If you’re going to get a 2 percent cut that you weren’t expecting,” she said, “you can’t operate that way. You have to be able to budget, you have to know what your payment rate is going to be.”

Here is the ConvergenceRI inteview with Virginia Burke, the president and CEO of the R.I. Health Care Association, sharing an in-depth analysis the stressors that have damaged the long-term care ecosystem in Rhode Island.

ConvergenceRI: Where are we with the long-term care landscape in Rhode Island:
Our long-term ecosystem is damaged. There are a number of stressors going on right now.

[At the same time,] there are some positive changes being made. So far, I am impressed with the new R.I. Medicaid director, Patrick Tigue. He’s responsive. He doesn’t shut providers out the way previous Medicaid directors have.

ConvergenceRI: What are the stressors?
Let’s start with UHIP.

ConvergenceRI: Is that still a big problem?
It is still a huge problem. I’d say Eric Beane, [the new director of R.I. Executive Office of Health and Human Services], pulled us out of the fire when he put an interim payment system in place.

There are two issues with that. First, the state is paying us with state-only money now. The plan is that eventually, they will reconcile everything, and the feds will kick in their 50 percent.

But the fear is: how is that going to happen? Is it really going to happen? Can we get it done in time? The state has two years to submit the claims.

Is UHIP going to be [able to do that?] There’s a backlog [in claims] that goes back prior to September of 2016 [and the launch of UHIP].”

Are we going to be able to get this done in time for the state to draw on its federal match?

The reason it matters to us, is that if the answer is no, that puts further strain on the state’s Medicaid budget, and we’re always the go-to source for cutting our fees, cutting our rates, to make up losses.

We, and the hospitals, we’re always the go-to’s for funding shortfalls in Medicaid.

ConvergenceRI: What does it mean in terms of your funding from the current state budget?
Our rates by statute are supposed to be adjusted by inflation, not consumer price index inflation, but the inflation in the cost of operating a nursing facility as determined by the federal government. It’s a real number; costs do go up by that amount.

Since our rates are based on the cost of care in 2011, yes, we need to have them adjusted for inflation. The shortfall gets bigger every year.

ConvergenceRI: Let’s take a quick step back. How did Eric Beane bail out the nursing home industry?
He listened to what we had to say, and in two weeks, he had $40 million in interim payments in the hands of the nursing facilities, the ones that were on the brink of receivership, because they had been providing services for months on end without pay.

ConvergenceRI: Why do you think that the alleged high costs of nursing homes was always targeted by state officials as the go-to place to make cuts in the Medicaid budget?
I think that people, particularly elderly people, are much more willing to harm nursing homes than hospitals, because the dread of being placed in a nursing home gets stronger and stronger the older you get. There is a synergy between the state’s desire to spend less money on Medicaid, which is a rational, reasonable desire, and senior advoacy groups such as AARP, whose members may be much closer than the rest of us to what I call the post golden years of retirement, and who advocate for home-based care. No one wants to acknowledge that we still need to have good nursing home care, or that our nursing centers provide highly specialized and compassionate care.

They really want to believe that it would be better and less expensive to care for everyone at home, but that’s not the case.

ConvergenceRI: Has anyone ever done the calculation for what it costs to deliver 24/7 care at home?
Not with the necessary rigor. I can tell you what the state pays in general revenue dollars per hour for nursing home care; it’s about $3 an hour for 24-hour care.

What they pay for the least expensive level of home care out of general revenue dollars is, conservatively, about $9 per hour.

So, there are some people [whose care] would be less expensive at home. Plenty of them. And, most of them are being cared for at home – the ones who need, say, less than five or six hours of care, that’s less expensive at home.

For the ones who need more than that, that [provision of services] is less expensive in a nursing facility. But, nobody ever seems to want to know that.

In fact, the people will often say, no, it actually costs the same $9 because they ignore the fact that we pay a nursing home specific provider tax. Nobody else pays it, a 5.5 percent tax on all of our revenues – our gross revenues, not our net revenues. That tax returns about 25 percent of the state’s general revenue spending [on Medicaid services to skilled nursing facilities] back to general revenue.

The numbers are there; it would be easy to do. I’ve been saying for years, why don’t we do that, and make rational decisions [around spending]. But the resistance to that is, no, we’re doing this because people prefer it, because it is better to have people at home who want to be at home. Let’s not talk about what it costs.

ConvergenceRI: How would it be possible to reframe the conversation, for your voice to be heard and listened to?
It is a question that I have spent a lot of time thinking about. I see it as a shortcoming on our part. What could I do differently to get our voices heard? How come this catastrophe [UHIP] that I was screaming my head off about got no attention, until the day I sat down with Eric Beane and said to him: You are pushing us over a cliff, and when the month of February’s bills roll in, and everybody files [for receivership], because they can’t [survive] financially, the finger is going to point straight at the Governor, and you’ve got to do something. And, you have about 10 days to get it done. That’s when things turned around.

I know that the Governor would not listen to us; she wanted us to go through Elizabeth Roberts. Elizabeth wouldn’t listen to us. Neither would Jennifer Wood. I don’t know where I failed, but I definitely failed.

ConvergenceRI: It seems as if the new people in place at EOHHS, at Medicaid, at DHS, are much better at listening to what you have to say. But how much of the problem is that you’re still confronting the politics of the budget dilemma. If we were to view the Reinvention of Medicaid as an experiment, as a pilot, at what point will the administration admit that it is not working?
Gary Alexander, [the former head of R.I. EOHHS under Gov. Donald Carcieri], is still saying that he saved $100 million by transitioning people out of nursing homes. I mean, I think this is standard practice, standard politics.

How can we get real about health care? Well, I think one big first step was when the Republicans tried to repeal the Affordable Care Act, and all of a sudden, people realized, “Wait a minute; this is actually a good thing. We’re actually getting everybody covered and paying for them in less expensive ways than we ever did before,” as people started to understand what Medicaid did,

I guess we have to be brought to the brink of catastrophe. I don’t why our country is so different from other countries in this way. Why we can’t be like Canada or Germany or Japan or Australia or other sensible countries about health care?

There is so much misinformation out there. If your elected officials are telling you that they’ve made this big accomplishment, you’re not going to disbelieve them unless it affects you personally.

ConvergenceRI: Can you talk a bit more about the stressors you’re facing in long-term care?
One is UHIP, particularly because we’re [being paid with] state dollars now. If we don’t eventually get federal matching dollars for that, we’re the ones who are going to pay, we the nursing homes, because they’ll have to cut Medicaid spending.

The second stressor is the nature of the interim payment system itself. What they’re doing is paying an estimate of what’s owed on for all these cases. You can’t get a federal match for estimates.

Assuming there is a light at the end of this UHIP tunnel, and one day the system will be working, the process is that they take all the interim payments back, process all the claims, and they pay out the correct amount.

It’s hard to have faith in the state’s capacity to do that accurately.

I picture, that out of thousands of claims, maybe hundreds of them will be disputed. The resources it takes to straighten all that out, and the financial burden placed on the facilities to do that, is enormous.

Keep in mind, we’re not like hospitals. We bill two sources primarily, Medicaid and Medicare. And now there’s Neighborhood. Health Plan [which is managing the Integrated Care Initiative. We don’t have large bookkeeping departments. But now we’re keeping a double set of books, to keep track of the interim payments.

I want to commend Eric Beane in anything I say about UHIP; he’s done a remarkable job.

ConvergenceRI: Is part of the problem with UHP the underlying concept – that technology can create efficiencies and economies to replace human interactions?
Yes. Human transactions are not easily translated into code.

ConvergenceRI: Can you talk about the importance of human interaction in the business of health?
In just the last week, I have had two consumers calling me up and asking for help in finding the right nursing home. That’s not our mission, but I do it, if someone calls asking for help.

Because when they ask for help, they are often at the end of their rope. Someone’s had a stroke, or a family member with dementia has wandered out into traffic and the family realizes that they cannot take care of that person without help.

They often need a lot of hand-holding and help through the process. That’s what the long-term eligibility office, the social workers do; they help people in that situation. And they work together with the facility social worker.

Often, it seems that the point of the new software is to make damn sure that the state is not spending a penny on anybody who’s not entitled to have a penny spent on them.

The technology should be a tool of the eligibility staff to use; it should not be the boss.

ConvergenceRI: Should people who made the bad decisions around the UHIP launch be held liable for their actions, beyond having lost their jobs?
I think there has been accountability. But I think that the House Oversight Committee has a responsibility to dig a little deeper and find out how these mistakes were made, and how to avoid them from happening again.

It would be good if they could find out exactly how such a thing happened.

My husband is a quality engineer. He likens UHIP to what happened with the Challenger explosion, with the number of times that the launch had to be postponed, as with UHIP. And somebody finally said, it’s going to go live, like it or not.

And, just like the Morton Thiokol engineer, who warned against the launch of Challenger, there were a lot of voices when UHIP was being launched, saying no, no, no, you’re not ready. But nobody wanted to hear it.

ConvergenceRI: Moving forward, where do we go from here? If you could wave a magic wand, what would you like to see happen?
I would love to sit down with the folks at EOHHS, with the providers and policy people and payment people, and go over some of the numbers. First of all, to ask: Where are we truly spending money where we shouldn’t be spending money? What’s going on with the money we are pouring into the Integrated Care Initiative? What do services really cost?

Not reaching the conclusions first, and then trying to find the numbers to support those conclusions. It would be an honest, painful look.

On our part, even though we are very much underpaid, recognizing that we are still costing the state more money every year, and it is not sustainable. How can we make care less costly?

I would like to have that conversation, what Reinventing Medicaid should have been about, instead of going through a charade of stakeholder involvement, instead of pretending that we’re going to enhance quality by cutting rates, or pretending that cutting per diem rates is an innovative idea, or ignoring everything that providers are saying, and go ahead with our foregone decisions.


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